Friday, April 14, 2006

"Congress has long required the use of such 'oxygenates' as ethanol and MTBE in gasoline. Midwest drivers have tended to rely on locally produced and corn-based ethanol, while places where ethanol is expensive to ship -- such as the East Coast and Texas -- have used petroleum-based MTBE. But the ethanol lobby wanted more market share, and so last year's energy bill included a giant new ethanol mandate, while at the same time denying liability protection for rival MTBE makers that are getting sued for having sold a product that Congress had once mandated.

MTBE makers are now fleeing the market; most oil companies will drop the additive entirely on May 5. So bye-bye to a significant portion of the domestic fuel supply, which already stretched ethanol producers have no hope of replacing any time soon. Since ethanol is difficult and expensive to transport, such highly populated cites as New York or Dallas that are far from the ethanol belt will suffer most from the gasoline shortages."

Congress and rent seeking is bad enough. But, getting sued for selling a product once mandated by Congress? Unfortunately, maybe I shouldn't be surprised.